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Solar thin-film maker ECD shutters production

A glut of solar panels and crushing prices have made life difficult for solar manufacturers this year, and bad news keeps coming. Longtime solar thin-film maker Energy Conversion Devices (s ENER), which has factories in Michigan, Canada and Mexico, has suspended manufacturing and will furlough 400 workers.

The Michigan-based company said it needs to stop production because it has made more solar panels than it can sell. The company only opened its plant in Ontario, Canada, earlier this year, hoping to take advantage of the regional market’s generous government subsidies. But the company has long been struggling to grow and make money.

While many solar companies experienced big jumps in sales and profits in 2010, Energy Conversion had to implement cost-cutting plans and moved some of its manufacturing to Mexico. It took more cost-cutting measures, including layoffs, earlier this year, and it is now expecting to lay off another 500 workers by the end of this year.

It no doubt experienced greater setbacks when, earlier this year, reports about low demand in Europe — the world’s largest solar market — and a pileup of unused solar panels in warehouses began to surface. Those reports have come from the industry’s leader in low-cost manufacturing — cadmium-telluride solar panel maker First Solar (s FSLR) — and from makers of silicon solar panels, which dominate the market today.

Energy Conversion’s shares fell 35 percent to reach $0.40 per share in recent trading.

Questions have long been raised about Energy Conversion’s ability to survive. The company’s amorphous-silicon solar panels, sold under the Uni-Solar brand, are far less effective than silicon solar panels, and that makes its products unattractive in markets where government subsidies are written to reward projects that can generate as much as electricity as possible. It therefore has to make them cheap enough to make up for the lower efficiencies, something that First Solar does with its cadmium-telluride solar panels. Even here Energy Conversion hasn’t delivered. For its 2011 fiscal year, which ended in June, the company posted $305.4 million in losses on $232.5 million in revenues, compared with $457.2 million in losses on $254.4 million in revenues for fiscal 2010.

Energy Conversion’s selling point is that its solar panels are pliable thin films without the use of glass as a protective layer. That design can be attractive for projects that require lightweight equipment and want to forgo the use of mounting systems, though those features serve specific needs for rooftop solar. The pliable thin films also find uses in consumer gadgets and military equipment.

The company isn’t the only one hurting. Many manufactures have filed bankruptcy (Solyndra, SpectraWatt, Evergreen Solar), while others have closed factories or reduced production at existing factories. First Solar started building a factory in Vietnam earlier this year but has put that plan on hold because it, too, needs to cut costs. Suntech Power (s STP), the largest silicon solar panel maker, announced on Wednesday that it won’t be expanding manufacturing in 2012.

Photo courtesy of Energy Conversion Devices

2 Responses to “Solar thin-film maker ECD shutters production”

  1. Fanof Ecd

    Energy Conversion’s selling point was a red herring – it should be obvious since “nobody is buying the [Unisolar] product,” as the local Michigan TV reported explained.

    See, each and every roof in the developed world built up to code can withstand the 3-5 psf dead weight of regular PV solar on penetrating or non-penetrating racks. So projects that require “lightweight equipment” simply don’t exist. It was all just a big lie. Like all the other lies coming from the fraud known as ECD / Unisolar / Solar Integrated and all the co-conspirators and collaborators.

    The “pliable thin films” also DON’T find any uses in consumer gadgets and military equipment. 99%+ of the PV consumer gadgets and military equipment use regular crystalline cells. For obvious reasons.

    Now, who is going to honor the warranties of all the monumental Unisolar failures such as the EUR50-million rooftop project in Spain ,etc etc made with the underperforming, overheating, degrading, delaminating, shortcircuiting, and, yeah, even igniting, Unisolar laminates once the company is liquidated?